Borrowers generally do not have to provide income verification or other typical loan requirements. You are able to remain in the home until you die, sell the home, or no longer use the home as your primary residence.
The amount of money you will be approved for is determined by:
- Your age and the age of your spouse (if applicable)
- Current balance on any outstanding mortgage
- Type of reverse mortgage you choose
There are three different types of reverse mortgages. Single purpose reverse mortgages are offered by local and state governments and non-profits. Or, Local and state governments and non-profits offer single purpose reverse mortgages. This mortgage is the least expensive, but can only be used for one purpose which is generally home improvements, property taxes and/or insurance.
There is a federally insured reverse mortgage that is backed by HUD. This is the most common type and is often administered by FHA, called a Home Equity Conversion Mortgages (HECM).
For homes with higher values, proprietary mortgages are available through private loans.
The last two are widely available. You can compare your mortgage options to find the lowest fees with the highest payout.
Payout Options include:
- Term is a fixed payment over a fixed time period
- Tenure is a fixed payment as long as you live in the home
- Line of credit is an open line where you can take distributions as needed, pay it back and reuse.
- Combination of monthly payments and a line of credit (term or tenure)